Executive Interview: What can Brown do for Healthcare?

As corporate health and welfare manager for United Parcel Service Inc., the Atlanta-based package-delivery company, Dale Whitney has a lot of people on his mind – more than 407,000 of them. That’s how many people work for UPS worldwide.

A 31-year employee of UPS, Whitney has been involved in the company’s health program since 1990. Given the number of employees and retirees who receive health benefits, it’s no surprise that UPS’s program offers a variety of choices. (In 2004, the company spent $2.2 billion on healthcare in the United States alone.)

For example, those who live in a network area can select a point-of-service plan, in which a primary care physician coordinates the individual’s medical care. Costs to the individual are lower when services are provided and coordinated through the primary care physician. Outside a network area, the individual can choose from several indemnity plans, which cover the services of any doctor or healthcare provider. In an HMO network area, the individual may elect HMO coverage.

UPS sponsors post-retirement medical plans for retirees who meet certain eligibility requirements and who are not otherwise covered by multi-employer pension plans. Generally, this includes employees with at least 10 years of service who have reached age 55, and employees who are eligible for post-retirement medical benefits from a company-sponsored plan pursuant to collective bargaining agreements. In many cases, these benefits have been provided to retirees on a noncontributory basis; however, in certain cases, retirees are required to contribute toward the cost of the coverage.

Journal of Healthcare Contracting: Has UPS made any changes to its healthcare benefits package in the past five to 10 years?

Dale Whitney: We haven’t been an employer that’s made tremendous wholesale changes to the plan in terms of reducing the number of choices people have. We still have point-of-service plans, some HMOs and in some cases, PPO plans and indemnity plans, depending on where people are located.

But how you look at your employees is more important than the financial system you use to pay for benefits. If you’re looking to help your people understand the choices they make and be better consumers of care, that’s probably more important than what plan they’re in. If your plan is designed so that the incentives for providers, patients, healthcare plans and employer are all aligned, that’s more important than whether it’s a point-of-service or PPO plan, or whatever the flavor of the day is.

JHC: How do you align incentives?

Whitney: The first thing is to make sure you don’t have disincentives in the plan. You don’t want a situation where an incentive exists for an employee or patient to make a choice that isn’t the best one for them medically. In other words, the financial choice and the medical choice have to be aligned. If you provide information and help the employee and physician choose wisely, they should make the best choice financially and medically. Oftentimes, it’s the same choice.

The most difficult part is that that the physician and patient don’t always have a lot of information. And it’s tough to make decisions without information. One of our strategies is to help our patients get information about their health. The other has to do with helping the physician know about their [patients] – the drugs they’re taking, their health risks, etc. Together, patients and physicians can make choices about what procedures are available to them.

JHC: Can UPS help patients and physicians get the kind of information you’re talking about?

Whitney: There’s a big gap in the amount of information a physician has. One of the things that was supposed to come out of managed care – and you can debate whether it happened or not – was coordination of care. The primary care physician was supposed to have been in contact with any specialist the patient saw, in order to help coordinate the patient’s care.

But as health plans move into less coordinated types of arrangements, that coordination of care no longer exists. As you move away from a plan with a primary care physician toward one in which the patient sees the physicians he or she wants to, someone else has to coordinate care. We’ve thrown that responsibility onto our employees.

We are working with those employees at highest risk to help them coordinate their care. We’re giving them an advocate, perhaps a nurse, to work with them and their physicians, and to give them access to information they otherwise would not have.

When electronic medical records are in place, physicians can go back to being the individuals who coordinate care. But right now, they don’t have access to that information [that would be available in an electronic medical record].

JHC: Can an employer such as UPS incentivize its employees to seek out coordination of their care?

Whitney: You can do it in different ways, and they’re not always financial. You would hope that most patients would see [coordinating their care] as being in their best interest, so you put positive incentives in place.

The first thing you have to do – and we’re in our fourth year of doing so – is educate your people, really try to get them to understand that they have a responsibility for their health. We want to show them that the system doesn’t work this way: You get sick, and the doctor and health plan have the responsibility to take care of you. We’re moving away from that toward [the concept] that you have the ability to seek out information about yourself and your illnesses.

Another responsibility that we as a large employer have is to develop tools to help consumers make good decisions. We’re constantly working with other employers, healthcare plans and provider organizations to do just that.

An example is our diabetes initiative. In Georgia, we’re working with 14 large employers, the state of Georgia, the Centers for Disease Control and Prevention, and Morehouse Medical College in Atlanta to put together a program that will reduce the incidence of obesity and diabetes in the state. It’s called the Georgia Diabetes and Obesity Project.

One of the pieces of that program is education – helping people understand that diabetes is progressive and that they can not only stop its progress, but control its onset. And if they contract diabetes, they have a responsibility to seek out the most effective and efficient medical care available.

We participate in a program called Bridges to Excellence. Physicians who believe they are doing an excellent job with their patients and who provide incentives for their patients to take care of themselves provide clinical information to the National Committee for Quality Assurance about the patients they’re taking care of. The [NCQA] looks at that information, scores it and determines whether these physicians do indeed meet the best-practices criteria, and whether they’re performing best practices on both a process and outcomes basis. In other words, are they doing the process correctly, and are they delivering good outcomes?

Employers can provide incentives for physicians to [follow best-practices guidelines]. Some are putting incentives in place [to encourage] patients to see these doctors and to take more responsibility for their health. That means asking them, “Are you doing all those things your doctor says you should be doing?” In the case of diabetes, we ask, “Are you keeping your [blood glucose] levels stable, or even lowering them? Are you maintaining your blood pressure, cholesterol and weight?”

There are two other pieces to the Georgia Diabetes and Obesity Project. First, there are health disparities. In Georgia, diabetes is not a disease that impacts populations equally. We’re working with Morehouse Medical School on that. Second, we are looking at our schools and trying to reduce obesity and poor eating habits in them. Programs in other states (such as New Jersey) look at the food that is being served in school cafeterias, and whether or not schools have exercise programs in place.

JHC: You are a board member of the National Quality Forum, whose mission is to implement a national strategy for healthcare quality measurement and reporting. Why did you get involved in NQF? What’s important about quality measurement and reporting?

Whitney: At UPS, we think metrics are important for everything. If you’re not measuring something, it’s difficult to improve it. The National Quality Forum is able to get consensus on which metrics we will use. It’s important to have some national measures in place. I’m not saying every market needs to do everything identically; but it is important that we are all looking at the same metrics. If one program is putting into place a pay-for-performance or reward program based on one set of metrics, then everyone should agree on the metrics. For the physician and hospital, it’s important that we’re all able to measure care in the same way. And for the consumer to be able to do any comparative shopping, there have to be common metrics and measures.

JHC: You mentioned pay-for-performance. What’s the future of these types of programs, which reward physicians for the quality of care they deliver?

Whitney: Pay-for-performance is a step toward getting to a whole different payment mechanism, where physicians and hospitals are paid for the value of the work they perform rather than the amount. Obviously, changing the whole healthcare payment system will take a long time. Pay-for-performance is a way to get incentives correct on a short-term basis.

JHC: UPS has a global perspective on healthcare. Have you seen a good healthcare delivery system in other countries? Are there elements that you believe should be incorporated in the U.S. system?

Whitney: One thing that’s different about our system is the amount of choice consumers have. Consumers have the ability to choose from different procedures and other forms of care, [some of] which might not amount to much in terms of their ability to extend our lives or improve the quality of life. But since we have the ability to spend money on them, we do. I’m not going to be the one to say we shouldn’t spend that money; consumers have to be the ones to make that decision.

What managed care did was ration care. The [managed care company] would say, “The outcomes for this procedure are not that good; it doesn’t make sense for us to pay for it.” Today, employers want to move in another direction. They need the consumer to be able to choose the procedures and type of care he or she receives; but they also need for the consumer to understand the costs and value of that care. In other systems, such as the National Health Service in Great Britain, these decisions are made by the physician and not questioned by the consumer. In that system, physicians decide the value [of certain procedures and types of care]. And they don’t spend money on end-of-life care that is expensive but has little chance of success. They don’t order it, and the consumers don’t question that.

Don’t ask me to make a value judgment on which approach is best. Our system has more choice and is more expensive. But I’m not sure that as a country, we can afford inefficient and ineffective care.